Here’s How Harrow (HROW) Weighed on SRK Capital’s Performance
SRK Capital, an investment management firm, released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the SRK Fund appreciated 17.15% while the S&P 500 and the Russell 2000 appreciated 26.29% and 16.93%, respectively. The fund increased 869.94% compared to 98.88% and 41.75% for the indexes respectively. The Fund underperformed the S&P 500 for the first time in 2023. In addition, please check the fund’s top five holdings to know its best picks in 2023.
SRK Capital featured stocks such as Harrow, Inc. (NASDAQ:HROW) in the fourth quarter 2023 investor letter. Headquartered in Nashville, Tennessee, Harrow, Inc. (NASDAQ:HROW) is an eyecare pharmaceutical company. On February 20, 2024, Harrow, Inc. (NASDAQ:HROW) stock closed at $11.49 per share. One-month return of Harrow, Inc. (NASDAQ:HROW) was 20.19%, and its shares lost 30.02% of their value over the last 52 weeks. Harrow, Inc. (NASDAQ:HROW) has a market capitalization of $403.502 million.
SRK Capital stated the following regarding Harrow, Inc. (NASDAQ:HROW) in its fourth quarter 2023 investor letter:
"2023 was the first year the Fund underperformed the S&P 500. The underperformance can be attributed to a combination of my own mistakes and factors I consider out of my control. With reference to the latter, equity markets surged higher during the final two months of the fourth quarter on the back of expected rate cuts, the majority of our holdings did not experience this same surge due to our portfolios positioning towards small obscure securities. The mistakes I made concern our position in Harrow, Inc. (NASDAQ:HROW). In April, when the stock was trading in the $20’s, I decided to sell a chunk of shares due to valuation and position size risk. In hindsight, the entire position should have been sold at that time. I did not fully exit the position, I’m embarrassed to say, because I allowed the big picture of significant revenue and earnings growth to cloud my judgement causing me to overlook the amount of execution risk and optimism that was priced into the stock. This mistake weighed on our performance in the second half of the year. At this time, we no longer hold a position in Harrow. While I still have conviction in the company and believe they will be highly successful, I have chosen to allocate the majority of the capital to a new opportunity that has similar upside as Harrow with minimal downside and a higher degree of predictability with several catalysts over the next 12-18 months that I believe will cause the stock to rerate."
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Harrow, Inc. (NASDAQ:HROW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Harrow, Inc. (NASDAQ:HROW) was held by 14 hedge fund portfolios, down from 18 in the previous quarter, according to our database. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
